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<br />Buffalo Farms Water Development, LLC <br />November 16-17, 2004 <br /> <br />Agenda Item 14b <br /> <br />The Total Project cost is estimated to be: <br /> <br />1. Planning and Design <br />2. Construction & Contingency <br />TOTAL <br /> <br />$ 5,000 <br />210,000 <br />$215,000 <br /> <br />A more specific cost break down is as follows: <br /> <br />Item <br />1. Drill New Recharge Well <br />2. 18" PVC Pipe (6000 linear feet) <br />3. Pipeline Appurtenances <br />4. Recharge Pond Construction <br />5. Bore Under Highway <br />6. Contingency <br />7. Planning and Design Costs <br />TOTAL <br /> <br />Estimated Cost <br />$ 66,000 <br />$ 85,500 <br />$ 25,500 <br />$ 3,000 <br />$ 15,000 <br />$ 15,000 <br />$ 5,000 <br />$215,000 <br /> <br />The recharge well has been drilled already, but the remainder of the project is expected to be <br />completed in Spring 2005. All easements and rights of way are being obtained. The Company <br />expects to be exempt from 404 permitting. This will be confirmed with the Denver District, Army <br />Corps of Engineers. <br /> <br />Financial Analvsis <br /> <br />The total estimated cost of the project is $215,000. Staff is recommending a maximum loan amount <br />of $193,500 (90% of the estimated project cost) for 20 years at an interest rate of 2.25%. The <br />Company will providethe additional $21,500 through initial member start-up contributions of $8,000 <br />each. <br /> <br />Table 1 is a summary of the financial aspects of the project. A CWCB Loan of $193,500 would <br />have an annual payment of $13,333 (including the 10% reserve requirement) at the loan terms of <br />2.25% for 20 years. The loan payment of $13,333 amounts to approximately $ 16.66 per acre foot <br />of consumptive use depletions replaced. <br /> <br />Project Cost $215,000 <br />CWCB Loan Amount (30 years) $193,500 <br />CWCB Loan Payment (includes 10% reserve) $13,333 <br />Annual Cost of Loan per AF (800 ac-ft. of consumptive use) $16.66 <br /> <br />Table 1. Financial Summary <br /> <br />Current market value for augmentation water in that portion of the river is approximately $20 per <br />acre-foot. The loan payment will be offset with savings from a reduction in LWU assessments and <br />the revenue generated from the lease of any excess augmentation credits from the project. <br /> <br />Creditworthiness: Since the company is newly formed, it has no past credit history. <br /> <br />Table 2 shows the Financial Ratios for the Company and indicates average overall to repay the <br />$193,500 loan. Since this is a new company, existing ratios are not applicable (N/A). <br /> <br />Page 4 of 6 <br />